Page 204 - DMGT546_INTERNATIONAL_TRADE_PROCEDURE_AND_DOCUMENTATION

Unit 9: Characteristics of Shipping Industries

9.4 Selecting Suitable Mode for Shipment of Cargo and Capacity Notes
Measurement

Different methods have different positives and negatives. Some are safer, some really fast and
others have a plus point of being inexpensive.
In order to supply their products to the customers, wholesalers and trade suppliers have to
choose among various shipment methods. Depending on the following important characteristics/
factors the sender may select any one or multiple modes. They normally consider some factors
before settling on the shipping mode. These factors are:
1. Business Size
2. Cost
3. Safety

4. Delivery Time
5. Frequency of Delivery, Goods to be delivered, once, occasionally, or regularly.
A shipment method will be evaluated by following characteristics.

1. Speed
2. Cost
3. Safety
4. Convenience

9.5 The Best Method

Each mode of freight transport has its own unique advantages. Choosing an appropriate method
is heavily dependent on distance, the geographic location of the desired destination, the nature
of items, seller’s budget, and any necessary deadlines or schedules that must be adhered to.
Items that must be moved quickly should be shipped by air, while goods that are not needed in
a hurry can be shipped inexpensively by sea. Most shipping routes often require the use of
several different modes of transport. Finding the best way to coordinate this logistic chain can
save any business a lot of time and money in the long run.

9.6 Conference System and Practices

A conference is an association of two or more liner shipping companies. The first conference was
formed in 1875, known as UK-Calcutta Conference. The characteristics of conference shipping
are:
1. Restrict/Eliminate Competition: They are organised to restrict/eliminate competition in
trade, regulating and rationalising sailing schedules and ports of call. They operate on the
basis of written agreement, defining rights and obligations of members. The members are
expected to follow the rules set by the conference under agreement. In the event of violation
of rules by any member, the agreement provides penalty. Penalty may be as high as the
forfeiture of the amount deposited by the member.

2. Benefits: The basic aim is to minimise losses and maximise profits by combating
competition among ship owners. There is a rate agreement in respect of the sailings
between the liner ships. The sailing schedules are regulated. They can be compared to

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